Enter the required inputs into this bond price calculator and estimate the price of a particular bond in seconds.
Use the bond price calculator to find out what paper bonds are worth according to the par value of the bond and current yields.
This tool is designed to help investors and professionals who want to invest in bonds. It quickly calculates the bond price.
The value of a bond calculator is very high for investors because it saves them from performing wrong calculations that can lead to loss.
A bond is a kind of fixed investment and when it is issued, the issuer gets the fund against the bond and the investor holds the bond for a specific interval as an investment.
The valuation means to determine the value of bond. The valuation of a bond provides you with the cash value that is associated with the bond.
It is beneficial for investors because it lets them know the rate of return that they will get on a bond investment. A bond valuation calculator is very helpful in knowing how much is a bond worth. As it allows to perform a high-speed calculation by just adding a few inputs.
Use the following bond price equation to determine the value of the bond:
Bond Price =\(\frac{C}{(1 + r)} + \frac{C}{(1 + r)^2} + \frac{C}{(1 + r)^3} + \ldots + \frac{C}{(1 + r)^n} + \frac{FV}{(1 + r)^n}\)
Put the values of all the variables in the above-written formula as we have done in the following example, so you can know how to find the price of a bond.
If it seems difficult then get the help of a bond price calculator and perform the calculation seamlessly.
Suppose I have a bond where:
Now how much is my bond worth?
The value of frequency is one because it's an annual bond
Coupon Per Period = face value × coupon rate/frequency
Coupon Per Period = 2000 x 5%/1 = 2000 x 5/100
Coupon Per Period = $100
Bond Price = \(\frac{C}{(1 + r)} + \frac{C}{(1 + r)^2} + \frac{C}{(1 + r)^3} + \ldots + \frac{C}{(1 + r)^n} + \frac{FV}{(1 + r)^n}\)
Now, put these values into the bond price formula:
The formula for calculating the bond price is as follows:
\[ \text{Bond Price} = \frac{\$100}{(1 + 0.05)} + \frac{\$100}{(1 + 0.05)^2} + \frac{\$100}{(1 + 0.05)^3} + \ldots + \frac{\$100}{(1 + 0.05)^7} + \frac{\$2000}{(1 + 0.05)^7} \]
Simplifying the terms:
\[ BP = \frac{\$100}{1.05} + \frac{\$100}{(1.05)^2} + \frac{\$100}{(1.05)^3} + \ldots + \frac{\$100}{(1.05)^7} + \frac{\$2100}{(1.05)^7} \]
Calculate each term:
\[ BP = 95.24 + 90.70 + 86.38 + 82.27 + 78.35 + 74.63 + 71.07 + 1421.36 \]
Adding up all the terms:
\[ BP = 2000 \]
Therefore, the Bond Price (BP) is \$2000.
This bond valuation shows that the present value of your bond is $2000.
You can perform the manual calculation with the help of a bond pricing formula, but the more convenient way is to use a bond calculator online. It will make the whole calculation easy for you.
Access this bond value calculator from your browser and derive the price of a bond effortlessly.
This bond calculator is an important tool that helps in pricing the bonds and making informed decisions.
Face value of a bond is the total amount that the bondholder receives at the time when the bond is matured.
This is the posted interest on the bond.
This is the yield that is received on doing another investment.
These are the years in which the bond reaches its maturity date. At this time, The issuer is bound to pay back the face value.
It's a frequency that informs about how many times the issuer pays interest payments to the bondholder.
The payouts are guaranteed so that’s why they are considered as a safe investment in most cases. But this investment is still a risky thing because it totally depends upon the issuer.
It is considered a low-risk investment because the 10-year treasury note in the United States is issued by the government.
If the interest rate goes up:
It is a normal thing because it depends upon several factors including interest rate, the credit rating of a company, and time to maturity. Variance in these factors can cause a change in the bond price.
It is a benchmark interest rate that one party wants to receive and the other party wants to pay during the exchange of fixed and floating interest rates in a contract. This contract is known as the Swap. This term is used by the issuers in deciding the interest to offer on the bond, keeping it equal to the market.
Wallstreetmojo.com : Bond Pricing Formula
Investopedia.com : Bond Prices and Yields-An Overview.
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